NEW YORK--Lots of people watch HBO. Not everyone watches it the way Reed Hastings does.

Hastings, co-founder and CEO of Netflix, sees growing competition between his company and HBO, a darling of the cable world and, with its HBO Go service and attendant mobile app, a rising star in online video.

A file photo of Netflix CEO Reed Hastings
Michelle Meyers

"The competitor we fear the most is HBO Go," Hastings said today at the UBS Media conference here. "They aren't competing directly with us now, but they can. HBO is becoming much more Netflix-like, and we're becoming much more HBO-like."

Netflix is in a vulnerable position right now, having confronted scads of angry subscribers and a plunging stock price in recent months, along with difficulties landing the kind of content it needs to remain a contender in streaming video.

In July, the company badly botched the announcement of a price increase, and as Netflix's stock then headed south, Hastings appeared to panic. He abruptly announced the coming of Qwikster, a DVD-by-mail-only service that would be separate from the streaming service. Customers recoiled and Hastings appeared caught off-guard again by the negative reaction. Within weeks, the Qwikster plan was dead.

Today, Hastings stood before a crowd eager for him to explain how he's planning to get beyond those troubles. And he had a bunch of supporters in the crowd--sort of. Ted Sarandos, Netflix's content-acquisition chief, was in the audience sitting next to Harvey Weinstein, one of the movie moguls who once tried to prevent Netflix from obtaining access to his movies.

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Hastings began the conference by predicting a roll out of a fiber-optics, fatter bandwidth, and said broadcast TV would begin a period of decline.

He added, though, that he thinks plenty of companies will provide streaming video. He mentioned, for instance, the news today from Reuters that Verizon plans to launch a standalone video service that allows customers to stream movies and TV shows over the Web.

As for the way Netflix handled the price hike and the aborted Qwikster plan, Hastings repeated much of what he has said before.

"We got overconfident," Hastings told the crowd. "We charged into streaming... and it turned out to be too fast. We berate ourselves for that lack of insight. In three to five years, we're not going to remember it."

He put a point on it by saying that Netflix is back on track. In what should come as music to the ears of Netflix subscribers, he added: "By Q2 [of next year] we'll have twice as much content as we did in the past Q1, Q2."

Just how good that content will be remains to be seen. The best content from five of the six studios has been licensed to other distributors including HBO. Hastings did say that Netflix will continue to seek agreements that give the company the rights to distribute content first--before cable or broadcast TV--similar to the deal it struck for the Kevin Spacey series "House of Cards."

Asked whether the company can afford to continue making deals like the one for "House of Cards" and whether it was overbidding, Hastings said: "That's what our competitors say because we [outbid them]."

He suggested that Netflix doesn't have to worry about a shortage of content. "There's a lot of artistic talent in the world," he said. "And its not a cornerable resource."

On this one, count Robert Wiesenthal, Sony Corp of America's CFO among the doubters. In his talk, just prior to Hastings, he suggested that its harder to create popular shows than it looks.

He noted that when the Academy Awards are announced next year, Sony Pictures, Paramount and some of the other major film studios will win awards and "you won't see anyone up there from iTunes and Netflix."

You may not see them yet, but who knows what happens in the future. Maybe Hastings can rewrite Hollywood history. The studios and networks are doubtful and suspicious of him now but allegiances in that town change all the time.

How's this for an example? After Hastings' talk, I chased down Weinstein as he left the ballroom and asked him about the time The Weinstein Company tried to block Netflix from acquiring its DVDs. Harvey and brother Bob built their firm after selling the iconic indie-studio Miramax to Disney in 1993.

In 2006, it was widely reported that The Weinstein Company entered into an exclusive 4-year distribution agreement with Blockbuster. The plan failed. Netflix managed to get their hands on Weinstein discs anyway. Apparently, Harvey's forgotten about that or buried the hatchet or maybe he's just rewriting a little Hollywood history himself.

"Are you crazy," he growled at me. "They're my friends. I love Netflix. They're the best company out there."

About the author

Greg Sandoval covers media and digital entertainment for CNET News. Based in New York, Sandoval is a former reporter for The Washington Post and the Los Angeles Times. E-mail Greg, or follow him on Twitter at @sandoCNET.
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